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UAE LUXURY PROPERTY FLOURISHES

Following its recent acquisition of the GCC franchise license, Gulf Sotheby’s International Realty is now the license holder of the exclusive global luxury real estate network in six Gulf countries and is set for expansion across the GCC markets, including Qatar, Saudi Arabia, Kuwait, Bahrain and Oman in 2016. Cityscape magazine spoke to Chairman George Azar about the UAE market and the firm’s plans for the region.

October 2015

Cityscape: What are your motivations for regional expansion at this particular point in time?

Azar: Our business plan proves to be successful and remains solid and competent amidst the many factors faced by the UAE’s realty market these days.

This year, we made a series of significant sales and we are expecting this performance to sustain in the next few years. Gulf Sotheby’s International Realty is expected to record an estimated USD 500m in local sales, and there are plans to grow that by at least 60% in 2016 when our international sales division takes on a full blown operation over the coming months.

The recently concluded Cityscape Global 2015 was also very instrumental in establishing the Sotheby’s International Realty® brand in the Dubai market. The region’s biggest real estate event stood witness as we announced our latest successfully closed deal for exclusive representation of two big government projects in the UAE.

Additionally, having recently signed franchise agreements for Sotheby’s International Realty® brand across the whole GCC, Gulf Sotheby’s International Realty gears with more strategic business approaches for the launch of its new seven offices across the region in 2016.

Cityscape: With the slump in oil prices, aren’t UHNWIs going to place their capital elsewhere?

 Azar: The luxury market, in general, is very limited; yet the clients who invest in it are the ultrahigh net-worth (UHNW) and high net-worth (HNW) individuals. This indicates that the property intenders or buyers are very high profile, sophisticated and they know what they want. And most importantly, they are reputed and credible investors.

Gulf Sotheby’s International Realty believes that the Dubai luxury market is robust and the company sees that its performance is flourishing. Just for this year, the majority of our significant sales is generated from the luxury space.

As for the oil price performance, it will not affect the luxury market because the income of most of the clients is not from oil.

Moreover, Gulf Sotheby’s International Realty is among those who embrace dauntless confidence of the Dubai market. From a business and residence perspective, Dubai is the main hub for the Middle East, India, Iran and some African countries. The city’s growth is very stable.

Cityscape: What is your view on the Abu Dhabi market?

Azar: I always have a strong, positive outlook for the Abu Dhabi realty market. Most GCC property investors look at Abu Dhabi because of its good yield component. In the last three or four years, the biggest intenders for Abu Dhabi properties were from the GCC.

Cityscape: With the firm’s GCC expansion set to happen in 2016, how will Gulf Sotheby’s International Realty optimise its presence expertise the region?

Azar: Every GCC area is unique.

It is best to understand that every GCC area has a different client base and appetite for products. Realising the varying potentials of each of these [GCC] markets, we have tailored fit our business plan for every member state or city, yet strategically combined with the prevailing expertise and resources of the Sotheby’s International Realty® brand, so we can efficiently capture a specific market.

For Saudi Arabia, the offices will have a manager that will administer three different cities. However, our business approach to the Dammam market is different from that of Riyadh and Jeddah. Riyadh and Jeddah will each have their own plan, but what is in common in all of these cities is our plan to start offering our extraordinary UAE properties and off-plan projects, as well as international properties.

Our initial step in tapping the GCC markets is to focus solely on the UAE properties and developments. We will concentrate on the big brands. And because the Gulf Sotheby’s International Realty brand thrives also on reputation, we will avoid dealing businesses with private developers and taking risks on those, unless we know the developer, and we have seen the funding and structure.

Gulf Sotheby’s International Realty, as a business and as a brand, possesses very strict business guidelines. We will talk only to established developers and probably do some business with them, and possibly represent them in these GCC countries with our local operations on the ground.

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